As a business owner increasing profits is always a positive, but you don’t want to turn customers away by charging too much. Running a restaurant can be a costly business from overheads, and high insurance premiums to simply buying ingredients and paying employees. Sometimes it can seem like an impossible battle to make ends meet. Increasing prices can be unavoidable at times, but there are also a lot of ways to lower your smaller costs and increase your overall profits. This article is all about how you can maintain your stellar prices while also lowing your restaurant expenses therefore increasing your profits.
Reduce Portion Size
We often serve more than we need to. Keep an eye out for any dishes that often have leftovers and reduce the portion size. This saves you money both on ingredients and on food waste. Offering children’s portions of your normal meals is another way to create extra value. Childhood obesity is a huge problem in Ireland with 1 in 4 nine-year olds being overweight or obese. The RAI even have a joint initiative with the Nutrition & Health Foundation called ‘Kids Size Me’ that aims to tackle this problem. So not only would you be offering additional value in your menu, but you’d also be tackling a nationwide problem.
Changing some of your old recipes can really help you to lower costs. This step should be approached with caution however, as if you change something on your menu drastically or change too many things you run the risk of losing customers. Small changes that don’t lead to a whole new product or menu can be a positive step for your restaurant. In fact, it can both lower costs and keep your food fresh.
While not suggesting you compromise the integrity of your recipes, it’s important to think about product quality. While having fresh, high quality ingredients is great, if they’re a minor ingredient and are costing you a small fortune; are they really worth it? Fresh ingredients are important but make sure they're not leaving you out of pocket at the end of the day.
On the topic of fresh ingredients, think of changing your menu around with the seasons. Buying fruit and vegetables that are in season considerably lowers the price and increases the quality of the food you are serving. Adjusting your menu seasonably keeps both your ingredients and your menus fresh. Ultimately resulting in keeping your customers engaged and coming back for more.
This should be a staple tactic of all your wait staff. If done right upselling can not only increase your profits but also improve your customers experience. Why not check out our article on ‘The Art of Upselling: Happier Customers & Higher Profits’ to find out some of the ways you can introduce this tactic in your business. A simple way to start though, is to have your staff offer extras such as dessert or coffee after a meal. Another key tip is to have them recommend products with high profit margins. These don’t have to be the most expensive items on the menu, but rather ones that can maximise profit potential.
Work with your suppliers to make sure that food costs won’t increase during the lifecycle of a menu item. If a key ingredient goes up in price a few days after you’ve put an item on the menu, it can be a disaster. It will either eat into your profits, or if you increase the price of the item, it could annoy or even turn away customers.
It’s a difficult balance between having enough staff on to cover demand and not having more people on the schedule than you need. You want to provide excellent customer service and having adequate staff cover is key to this. But you don’t want to pay people to stand around doing nothing. Encouraging customers to make reservations should help. If you have a large number of reservations, you’ll know to have extra staff on, and your customers will be guaranteed both a table and better service. However, unfortunately, there is no easy fix to this scheduling problem. You will end up with too many people on one day and too few on another; but tracking footfall patterns can help. There are some days you will definitely be busier, such as weekends and bank holidays, so make sure to schedule extra staff for these days.
If you need finance while you wait for the increased profits to come rolling in, GRID’s business loan could be the perfect choice for you. It offers flexible repayments that work by taking a percentage of your credit/debit card takings. This means that when you’re earning less, you pay back less! This option is great when you’re expecting an upturn in profits because it doesn’t leave your cashflow stretched in the meantime. GRID's loan works both to finance your everyday restaurant expenses or to fund a larger project like a refurbishment.
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